Evidence of meeting #44 for Indigenous and Northern Affairs in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was homes.
A recording is available from Parliament.
Conservative
Kyle Seeback Conservative Brampton West, ON
What's the difference between the 79 and the 13? Why is there a bunch that haven't? What's the delay for them?
Chair, First Nations Market Housing Fund
I'm going to ask Deborah Taylor to answer. She's more on the ground with that.
Deborah Taylor Executive Director, First Nations Market Housing Fund
Another 47 first nations have gone through the process; they passed the band council resolution. They have participated in providing all their documentation. When we concluded our assessment, we determined they were not yet ready to safely guarantee loans, and so they are working using capacity-building to strengthen what they need.
In some cases it may be to improve their finances, but in many cases it is to improve governance aspects, including things like developing a housing policy and implementing a payment system for their current stock. It may be developing a system to give the right to someone to occupy a piece of their land. It may be some training that's necessary for their staff so they can perform their functions and provide services to the community.
So the 79 plus the 47 have completed the process, and 58 are currently in the process. As the chair said, they have passed that resolution declaring they believe in market-based housing, and they wish to get there.
Conservative
Kyle Seeback Conservative Brampton West, ON
How many first nations communities are in the three pillars but have not satisfactorily met the test you've set?
Executive Director, First Nations Market Housing Fund
Those 47 are currently working on improving, strengthening the areas that we determined together with them were in deficit, that for whatever reason caused them not to be able to safely guarantee loans.
Conservative
Executive Director, First Nations Market Housing Fund
Yes, we do. We use part of our interest income to be able to fund those capacity development initiatives and to have experts work with them to be able to increase their skill.
Conservative
Kyle Seeback Conservative Brampton West, ON
How long do you see for those 47 first nations to develop that capacity? Do you have a timeline or timeframes for them?
Executive Director, First Nations Market Housing Fund
Our target timeframe is to accomplish that within a three-year period. For some first nations it's taking longer. We have the example of three that have already gone through that process, so they were approved for capacity development only and since then have advanced to credit enhancement.
It's very difficult for some of them to get through the process when they never paid for their housing previously. You're talking about establishing a system where people begin to pay something, where they are informed about the need to contribute something from their own resources to take care of the housing, and then to be able to expand that to the point where the members who do qualify would have the opportunity to get their own loan.
We don't want to create a system in which a first nations borrower fails, or the first nation itself fails, and it's also not our goal to have the first nation chief and council pay all the loans in a community.
Some first nations certainly have the wealth and the capacity to do that, but the idea was to try to create a system akin to what exists in an off-reserve environment where people have that opportunity to go to the bank and be able to borrow for their own housing.
Conservative
Kyle Seeback Conservative Brampton West, ON
I would think building that capacity issues has spinoffs for other aspects of management, so there's a positive I think in general that comes from this in addition to the positive of being able to access the fund for building homes.
Executive Director, First Nations Market Housing Fund
Absolutely. There are linkages with economic development in communities. We have success stories where communities have been able to access capital for other reasons, or non-residential interests. We have first nations as well that we have helped support to qualify through the First Nations Financial Management Board process to create their financial administration law and to build those policies. So we have worked with the FNFMB in several communities to try to complement their work too.
It's about strengthening the community in a holistic way. You want people to want to invest in their community, so they they need to know that they have have a strong, stable government—a strong, stable administration, with schools and businesses and other aspects that people would take for granted in an off-reserve environment.
Conservative
Kyle Seeback Conservative Brampton West, ON
I know funding is always an issue, but do you find that the funds you have are enabling you to move people along that spectrum in capacity-building as quickly as possible, or do you think you need more funds to do more capacity-building for these first nations?
Chair, First Nations Market Housing Fund
Our request for capacity development is growing. We're now having to start to budget very carefully on how capacity development dollars are spent.
Conservative
The Chair Conservative Blake Richards
Thank you very much.
We'll now move to our second round. In that round we have five minutes per each member.
We'll start with Ms. Hughes.
Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON
Thank you very much.
Mr. Fontaine, I must say that your presentation was probably one of the better ones we have heard in the course of our study. I very much appreciate the suggestions you have made to improve the situation for aboriginal people.
Can you tell us more about the work that is being done to improve financial literacy? According to what you have said, the government should invest more in that area.
Executive Director, Innu Takuaikan Uashat Mak Mani-Utenam (ITUM)
Over the past 40 years, all of the first nations of Canada have evolved. Before that everything was quite simple: we managed the programs the federal government transferred to us. The communities have changed and their portfolios are completely different, whether we are talking about housing, economic development, relationships with various sectors, or natural resources. The companies work in completely different markets. The context communities live in has also changed completely. However, governance in most first nations is still based on the Indian Act or on electoral rules based on their customs.
Very few communities have concluded comprehensive land claim agreements that took governance to another level. The people are like the communities in that they have very little knowledge of financial matters. We manage $70 million a year and we have 500 permanent employees. In the summer that number climbs to 900. And that is without counting the 14 or 15 businesses that belong to us and employ 150 people who live in a completely different context.
The risk analysis for each one of these dossiers is important, and the human resources are extremely limited. Most of the people on the council resemble their community and have very limited financial knowledge. Some major efforts have to be made to improve that knowledge.
Everyone submits new projects to us. We received a project for a third rail line in the Labrador Trough region. We see projects for diversification or secondary or tertiary processing in fisheries. We see projects for extraction of natural resources. A $600-million, 200 mw wind farm project was submitted to us, and we asked to be the owners of it. All of that cannot be accomplished without a minimum of financial knowledge.
The communities and the environment are changing as time goes by. So we have to do a lot of work on a country-wide scale. Proximity means that just about anyone can get elected tomorrow morning. In our community there are 4,500 people. Communities of 100 people are lucky if they have someone among them who knows how to manage the sums that are transferred to us.
NDP
Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON
Thank you very much.
My next question is for Mr. Beaucage.
Thank you very much. I know that you know the first nations communities quite well, because of your experience, even as the Ontario regional chief.
I did visit quite a few of the communities in Minister Rickford's riding, and what I heard over and over again from a lot of those communities is that they would love to build housing, but they can't because they don't have the infrastructure. You talked about the ministerial approval, and I think that's quite important as well.
So I'm just wondering whether you have come across that problem, where first nations want to get on board and can't because they can't get infrastructure projects that would allow them to build that capacity.
I would also just mention that we have been fighting for some carts for health care in Sioux Lookout, and they're sitting in a storage compartment right now, without approval to move forward.
Conservative
The Chair Conservative Blake Richards
Unfortunately, Ms. Hughes, the time has now expired.
We'll move to Mr. Barlow for five minutes.
Conservative
John Barlow Conservative Macleod, AB
Thank you, Mr. Chair.
I'll try to fit in as much as I can here in five minutes.
Mr. Beaucage, I'll start with you. You spoke a bit about having some pretty lofty goals with this program initially. I agree with my counterpart that there's nothing wrong with setting some solid goals. But going through your information here, you built 55 homes in the first six years of the program, but in the last two, since you testified before the Senate in 2013, you've built 45. Obviously the process is going much, much more quickly quicker now and you're seeing an accelerated rate.
With those 99 homes that have been built, you have about 4,650 that are committed. Once you've made the commitment to the 4,650, what is the timeline for those to be completed? What's the process they're going through now?
Executive Director, First Nations Market Housing Fund
If I may, the process would be that the arrangements would get set up between the first nation and the lender partners that the chair referred to. Depending on where you are in the country, there are three national lenders that serve first nations: the Bank of Montreal, the First Nations Bank of Canada, and the Peace Hill's Trust. Again depending on where you are, you might choose to have another lender as well.
The first nation council would entertain proposals from those lenders as to what types of terms and conditions they would be willing to offer their citizens who are qualified to borrow. We would assist the first nation in setting up their process by which they would be willing to provide a guarantee to an individual member. In addition to meeting the bank's criteria, the first nation might decide it would like some other conditions, for example attending a maintenance course. If you have never maintained your own home before, you may not be aware of the things that are required, especially if you're taking on home ownership responsibilities. Some councils have asked for a will to be put in place, or for the owner to have life insurance and disability insurance, those types of things.
Once they've established that process, the first nation decides who within their administration will be responsible for performing those things and what types of homes they will permit in their community. Will they permit manufactured homes in addition to stick-built homes, for example? Can you have do-it-yourself, or do you need to hire contractors? If you have to hire contractors, are they available? Do they have to meet conditions? All of those items are factors that a first nation has to put in place to have that system.
Once that's in place and they're advertising to their members that it's available, we support them with workshops on what it is to become a homeowner, how to work through credit, the types of down payments that you might be required to save for, and then there's a pre-approval process within the community in which someone goes to the bank and qualifies.
What we have been told by the banks is that about 50% of the people are turned down because of bruised credit, so we will help them try to fix that credit. For some people it may be a fairly short-term fix. It may requires them to cut up some of their credit cards, if they received offers and thought they were great, even though they don't owe anything—which in fact that goes against you when you go to apply for a loan. In other cases, there are more difficult situations. People didn't know they were bruising their credit along the way and now they have to work out of it, and it might take them two or three years.
It really comes down to setting up that whole system within the community, that access and enabling people to go forward, then having them make the choice to go the bank to see if they qualify or not. That starts the process, as it does for anyone else who wishes to build their own home.